FULL RECOMMENDATION
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990 SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990 PARTIES : BRISTOL-MYERS SQUIBB (REPRESENTED BY IRISH BUSINESS AND EMPLOYERS' CONFEDERATION) - AND - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION TECHNICAL, ENGINEERING AND ELECTRICAL UNION PENSIONS REVIEW GROUP DIVISION : Chairman: Mr Duffy Employer Member: Ms Doyle Worker Member: Ms Tanham |
1. Proposed closure of Defined Benefit Pension Scheme.
BACKGROUND:
2. This dispute arose from the Company's plan to close its defined benefit pension scheme. This dispute could not be resolved at local level and was the subject of a Conciliation Conference under the auspices of the Labour Relations Commission. As agreement was not reached, the dispute was referred to the Labour Court on the 23rd June, 2014, in accordance with Section 26(1) of the Industrial Relations Act, 1990. Labour Court hearings took place on the 26th June, 4th July and 28th July, 2014.
RECOMMENDATION:
This dispute was referred to the Court by the LRC pursuant to section 26(1) of the Industrial Relations Act 1990 as involving the Company, SIPTU and TEEU. A number of employees are separately represented by a body known as the Pensions Review Group (PRG). With the agreement of the Company and the Unions, the PRG participated fully in the Court’s investigation of the dispute and made submissions on all of the issues in dispute.
The Court held three hearings to investigate this dispute. In the course of the first two hearings the Court met with the parties in side session so as to more fully explore their respective positions on the issues involved. The Court also adjourned its investigation so as to allow the parties to engage in facilitated negotiations through an agreed facilitator.
The Court received the report of the agreed facilitator which, together with the submissions of the parties (including the PRG), has been taken into account in formulating this Recommendation.
The Court puts forward the recommendation that follow so to define the basis upon which the company will close its defined benefit pension scheme and introduce a defined contribution scheme through which future pensions entitlements will accrue.
Each of the issues that were identified as outstanding in the facilitator’s report are addressed sequentially in this Recommendation as follows: -
- 1.Link to Final Salary
The Court recommends that the Company’s final proposal on this issue be accepted.
2.Compensation
The Court recommends that by way of compensation for the discontinuance of the defined benefit scheme, the Company should allocate a lump sum of €500 to each individuals defined contribution account in each of the first five years of the scheme (a total payment of €2,500 per employee).
3.DC Structure and % contribution rates
The Court recommends that the Company’s final position be modified so as to provide a core Company contribution of 7%. The other aspects of the Company’s proposal on this point should be accepted.
4.Time for LRC and Balloting
The Court recommends that the ballot on this Recommendation should be completed by close of business on Wednesday 6thAugust 2014. The Company should defer the closure of the defined benefit scheme until that date so as to facilitate the ballot.
5.Phased Implementation
- 6.Administration Costs of DC Scheme
The Court is satisfied that the Company’s position on this point is consistent with normal practice in relation to defined contribution schemes. In these circumstances the Court recommends that the Company’s position be accepted.
- The Court recommends that the employees be provided with all available investment choices.
Signed on behalf of the Labour Court
Kevin Duffy
28th July, 2014______________________
JFChairman
NOTE
Enquiries concerning this Recommendation should be addressed to John Foley, Court Secretary.